Ford seen in acquisition binge 1-5-99

SuzanneMiller

LONDON (CBS.MW) -- Flush with some $23 billion in cash at a time of fast consolidation in the automobile business, Ford Motor Co. is being linked to an amazing cache of premium manufacturers.

Reports in London suggest the No. 2 U.S. auto giant (F)
F, -1.39%
may be on the verge of buying Germany's family-run BMW, which also owns Rover, and Sweden's Volvo (VOLVY)
volvy
. Other names being floated include Nissan (NSANY)
NSANY, +0.71%
and Honda (HON)
volvy

Whether this is Ford's wish list, or whether they are indeed talking with these auto makers, remained unclear Tuesday. A spokesman with the Detroit-based auto giant would only say: "It's [our] policy not to comment on rumors." A spokesman in the U.K. said pretty much the same: "We cannot confirm or deny [this]. It's market speculation."

Analysts suggested that a hook-up with Volvo, if Ford is so inclined, might be easier than a purchase of BMW, which has been jealously controlled by Germany's Quandt family since 1960. The family owns a 45.6 percent stake in BMW, valued at roughly 10 billion deutsche marks (or about $6 billion).

"The rumors make sense," especially with Volvo, said one London-based analyst who declined to be named. He said he very much doubted that BMW would step up to the alter because of the Quandts' known resistance to letting the famous car maker out of the family.

The analyst said he had recently dinned with an associate of the family. "They said it was a company their father had built up and if they sold it -- what else would they put their money into?"

BMW's persistent denials have failed to quell speculation it will cut a deal to be acquired. As recently as Dec. 11, the company -- which is the third largest carmaker in Germany -- was forced to deny it was in merger talks with Ford.

But the markets are nonetheless in a lather over speculation that a deal is imminent -- evidenced by the surge in Europe's auto shares Tuesday.

Robert Eaton, joint chairman of DaimlerChrysler, was quoted in the Financial Times as saying at the Detroit motor show that a significant deal between two European manufacturers would be announced "within the next 90 days."

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